Subhash Chandra Gets NCLT Nod For ₹6.5 Cr Repayment Plan Against ₹22,006 Cr Claims

The National Company Law Tribunal (NCLT) has approved a repayment plan under which media baron Subhash Chandra will pay ₹6.5 crore to settle admitted creditor claims of about ₹22,006.57 crore in his personal insolvency resolution process, translating into a haircut of nearly 99.97% for lenders, according to a PTI report.

NCLT Member (Judicial) Nilesh Sharma, acting as the third member in the matter, approved the plan under Section 114 of the Insolvency and Bankruptcy Code (IBC) on Tuesday. The decision came after the two-member bench had delivered a split verdict, prompting the tribunal president to appoint Sharma as the third member.

Sharma rejected objections from dissenting creditors led by LIC Housing Finance, which had argued that the proposed repayment was “unviable and unlawful”, according to the NCLT order cited by the news agency.

Why Creditors Opposed The Plan

LIC Housing Finance had pointed out that against its admitted claim of ₹1,322.39 crore, the proposed repayment was only ₹38.09 lakh, or around 0.028% of its dues. The lender also argued that the repayment plan treated the ₹6.5 crore amount as indicative rather than certain.

The objecting creditors collectively held less than 20% of the voting share, while the plan received approval from creditors representing 80.81% of the voting share, the news agency reported.

The NCLT said the resolution professional’s valuation showed that Chandra’s personal estate was worth significantly less than the amount proposed under the plan. It also said rejecting the plan could result in bankruptcy and may not provide dissenting creditors with better recovery.

NCLT Says Plan Will Bind All Creditors

The tribunal said its role was not to replace the commercial decision of creditors with its own assessment of whether the settlement amount was adequate. It said its role was supervisory and judicial within the framework of the IBC.

The NCLT further held that once approved under Section 114, the repayment plan would be binding on all creditors under Section 115, irrespective of whether they voted for or against it.

It said allowing dissenting creditors to separately recover their full original dues would defeat the statutory framework and result in unequal treatment of creditors.

The resolution professional has now been directed to prepare the revised and final list of creditors after giving effect to the exclusions ordered by the tribunal and take steps for redistribution of the approved repayment plan value.

The matter will now return to the original division bench for a formal order in line with the majority opinion, as required under Section 419(5) of the Companies Act, 2013.